Bay Area home prices zoom in March; highest since Dec. 2007

The median price paid for a Bay Area home or condo shot up to $570,000 in March — 7.2 percent higher than in February and 23.2 percent more than in March of last year, according to DataQuick.

That was the highest median since $587,500 in December 2007, but still below the all-time high of $665,000 in June and July of 2007.

Sales and prices typically pick up between February and March, but the seasonal price increase this spring was higher than the long-run average of 4.3 percent. The pickup in sales, however, was weaker than average.

Sales and prices typically pick up between February and March, but the seasonal price increase this spring was higher than the long-run average of 4.3 percent. The pickup in sales, however, was weaker than average.

The number of new and resale homes and condos sold in the nine-county region hit 6,308 — up 27.1 percent from February but down 12.9 percent from March of last year. Typically, sales rise 39.3 percent between February and March.

Inventory — the number of homes on the market — is still low by historical standards across the Bay Area. That is contributing to the relatively sluggish sales volumes and price spikes. But prices might be even higher if not for the fact that credit is still tight and affordability is declining for many would-be buyers, says DataQuick spokesman Andrew LePage.

San Francisco was the only county where home sales rose on a year-over-year basis, but the median price still rose 14.6 percent to $937,500, the highest in the Bay Area.

Sales rose in San Francisco thanks to a “surge in new condos,” Carlisle says. “In 2012, developers started to jump back in to build. Now we are two years down the road. It is just starting to get traction/velocity.” However, “inventory is not getting close to meeting demand.”

Between 2010 and 2013, the population of San Francisco rose by about 32,000 people but the city added only about 4,200 new housing units (both for rent and for sale). “Since the average housing size is 2.3 people and about 38 percent of our people live alone, those 4,200 units don’t go a long way,” he adds.

Another 6,000 units are under construction, according to his analysis of the San Francisco Planning Department’s Pipeline Report. Carlisle estimates those should be completed in 2014 and 2015. In addition, 4,200 units have construction permits and “some of those might hit in the next couple years as well.”

In theory, an increase in supply should moderate price increases, but “the new condo units are going for very high prices, over $1,000 per square foot wherever they are” in the city, Carlisle says. When you mix those high-priced new units with sales of existing units, prices for San Francisco as a whole are likely to continue going up.

Carlisle noted that 44 percent of the homes sold in San Francisco last month went for more than 10 percent above asking price and 21 for more than 20 percent above asking.

Outside of San Francisco, the frenzy is not quite so fierce. Of homes and condos advertised on the Multiple Listing Service that sold in March without a price reduction, the sales-price-to-list-price percentage was 110 percent for San Francisco, 105.3 percent for San Mateo, 105.6 percent for Alameda, 102.3 for Contra Costa, 100 percent for Sonoma and 99 percent for Marin counties, according to data from BrokerMetrics.

Until more homes come on the market, competition is likely to remain stiff. But as long as competition remains stiff, some homeowners will be reluctant to put their homes on the market because they will have a hard time buying a new one unless they move to a cheaper market.

Another thing keeping a lid on sales is a decline in foreclosure and short sales. Foreclosures accounted for 4.5 percent of Bay Area resales last month, down from 5 percent the month before, and from 10.2 percent a year ago, according to DataQuick. Short sales made up an estimated 5 percent of Bay Area resales last month, down from 6.9 percent in February and from 15.0 percent a year earlier.

The percentage of buyers who appear to be paying all cash also is declining. They accounted for 25 percent of sales in March, down from a revised 28.2 percent in February and down from 31.0 percent a year earlier, DataQuick says.